Cocaine at doses of 30 mg/kg or more produces an acute hepatotoxic effect in mice pretreated for four days with either phenobarbital or 3-methylcholanthrene. Both of these agents act to induce microsomal drug metabolism of the liver. Under a similar protocol no hepatotoxicity was observed in phenobarbital pretreated rats, guinea pigs, or rabbits. Metabolism studies in vivo and in vitro with isolated hepatocytes from mouse and rat indicate that hepatotoxicity is related to the rate of formation and subsequent metabolism of norcocaine to a toxic metabolite. Hepatotoxicity was not prevented by reserpine, indicating that the toxicity is not related to the catecholamine effect of cocaine. Studies with radiolabelled cocaine demonstrated that liver toxicity is associated with covalent binding of radiolabelled material to hepatic protein. These results suggest that norcocaine is metabolized to a chemically reactive intermediate which covalently binds to tissue protein to produce cell death.